Citation Nr: 18152095 Decision Date: 11/21/18 Archive Date: 11/20/18 DOCKET NO. 08-22 970 DATE: November 21, 2018 ORDER Entitlement to waiver of recovery of overpayment of nonservice-connected pension benefits in the calculated amount of $8,998.14, to include whether the debt resulting from the overpayment was properly created, is denied. FINDINGS OF FACT 1. The Veteran was in receipt of nonservice-connected pension benefits and notified that incarceration in excess of 60 days following conviction for a felony or misdemeanor would result in discontinuance of his VA compensation benefit. 2. On January [redacted], 2004, the Veteran was convicted of a felony and incarcerated. On March [redacted], 2004, the sixty-first day following conviction, his nonservice-connected pension benefit was discontinued. 3. The Veteran was mailed a decision of indebtedness on February 24, 2005. 4. There was not sole administrative error in creation of the debt and it was otherwise properly created. 5. VA received an application for a waiver of indebtedness for the recovery of an overpayment in the amount of $8,998.14 in April 2006. 6. The application for a waiver of indebtedness was received more than 180 days following the decision of indebtedness, and the Veteran did not provide sufficient evidence to warrant an extension of the 180-day deadline. CONCLUSION OF LAW The criteria for entitlement to waiver of recovery of overpayment of nonservice-connected pension benefits in the calculated amount of $8,998.14, to include whether the debt resulting from the overpayment was properly created, have not been met. 38 U.S.C. §§ 1505, 5112, 5302; 38 C.F.R. §§ 1.962, 1.963, 3.500, 3.660, 3.666. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty in the U.S. Army from January 1968 to January 1970. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a May 2006 decision issued by the Department of Veterans Affairs (VA) Committee on Waivers and Compromises (COWC). In the June 2008 substantive appeal (via VA Form 9), the Veteran requested a hearing before a Veterans Law Judge (VLJ). The hearing was scheduled for February 2012, and a December 2011 notice letter informed the Veteran of the time, place, and location of the hearing. The Veteran failed to appear for the scheduled hearing and did not provide good cause or otherwise request the hearing be postponed or rescheduled. Accordingly, the Board will proceed as if the request for the hearing has been withdrawn. 38 C.F.R. § 20.704(d). The appeal was previously remanded by the Board in June 2012 and December 2017. The Board has limited the discussion below to the relevant evidence required to support its finding of fact and conclusion of law, as well as to the specific contentions regarding the case as raised directly by the Veteran and those reasonably raised by the record. See Scott v. McDonald, 789 F.3d 1375, 1381 (Fed. Cir. 2015); Robinson v. Peake, 21 Vet. App. 545, 552 (2008). 1. Entitlement to waiver of recovery of overpayment of nonservice-connected pension benefits in the calculated amount of $8,998.14, to include whether the debt resulting from the overpayment was properly created The Veteran contends that the debt created against his account is invalid and that a waiver of indebtedness for the recovery of the overpayment should be granted. For the reasons that follow, the Board finds that the debt was valid and a waiver of indebtedness is denied. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. 38 U.S.C. § 5302; 38 C.F.R. § 1.962. Overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived. 38 C.F.R. § 3.660(a)(3). Pursuant to 38 U.S.C. § 1505, incarceration in excess of 60 days following conviction of a felony or misdemeanor will result in the discontinuance of the VA compensation benefit beginning sixty-one days following conviction. See 38 C.F.R. § 3.666. Where the overpayment occurred by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment of debt owed to VA. 38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2); Erickson v. West, 13 Vet. App. 495, 499 (2000). Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGPREC 2-90 (Mar. 20, 1990). An error resulting in overpayment will not be classified as VA administrative error if it is based on an act of commission or omission by the beneficiary, or with the beneficiary’s knowledge. Id.; Jordan v. Brown, 10 Vet. App. 171 (1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous); see Dent v. McDonald, 27 Vet. App. 362, 380 (2015) (knowledge can be actual or constructive). In this case, the Veteran was in receipt of nonservice-connected pension benefits and was subsequently incarcerated. The evidence shows he was convicted for a felony on January [redacted], 2004; therefore, discontinuance of the benefit on March [redacted], 2004 was proper. The evidence also shows the Veteran had at least constructive knowledge of the relevant statutory law and regulatory provisions as he had been provided notice of such in May 2002. See May 2002 notice letter, enclosure VA Form 21-8769 (providing the Veteran notice of the pertinent law). As the Veteran should have known that the continuation of payments was erroneous, there is no sole administrative error. Moreover, the agency of original jurisdiction (AOJ) conducted a financial audit of the Veteran’s account for the relevant period to confirm the amount of the overpayment. In April 2016 he was sent a decision affirming the validity of the debt, which explained how the debt was created and included a copy of the financial audit. The Veteran did not timely disagree with that determination and, as discussed above, the creation of the debt was, in fact, valid. This intertwined issue merits no further discussion. The Board will proceed to consider whether a waiver of indebtedness is warranted. The recovery of overpayment of any benefits shall be waived if collection of such indebtedness would be against equity and good conscience and if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver. 38 U.S.C. § 5302; 38 C.F.R. § 1.963(a). Importantly, the application for such a waiver must be received within 180 days following the date of a notice of indebtedness issued on or after April 1, 1983 by VA to the debtor. 38 C.F.R. § 1.963(b)(2). The 180-day period may be extended if the individual requesting waiver demonstrated to the Chairperson of the COWC that, as a result of an error by either the VA or the postal authorities, or due to other circumstances beyond the debtor’s control, there was a delay in such individual’s receipt of the notification of indebtedness beyond the time customarily required for mailing. Id. The Veteran was mailed notice of the decision of indebtedness on February 24, 2005. VA did not receive an application for a waiver of indebtedness until April 2006, well in excess of the 180-day limit. Generally, the Veteran contends that he did not receive the decision of indebtedness because, at the time of mailing, he was incarcerated and mail distribution system in prison is inconsistent. In his own words, the prisons have inmates distribute mail to other inmates and this results in a lot of non-receipt of mail. The Veteran did not provide any other evidence of non-receipt of the decision of indebtedness other than his lay statements. “[T]here is a presumption of regularity under which it is presumed that government officials ‘have properly discharged their official duties.’” Ashley v. Derwinski, 2 Vet. App. 307, 308-09 (1992) (citing United States v. Chemical Foundation, Inc., 272 U.S. 1, 14-15, 71 L. Ed. 131, 47 S. Ct. 1 (1926)). Therefore, VA is presumed to have properly discharged its official duty to mail the Veteran a notice as to his indebtedness. While “the presumption of regularity is not absolute; [and] it may be rebutted by the submission of ‘clear evidence to the contrary,’” id. 2 Vet. App. at 209 (citing Rosler v. Derwinski, 1 Vet. App. 241, 242 (1991)); the Veteran’s assertion of nonreceipt of a notice is not sufficient to overcome the presumption of regularity that VA properly mailed such notice to him in the regular course of business. See Mason (Sangernetta) v. Brown, 8 Vet. App. 44, 55 (1995) (“appellant’s statement of nonreceipt, standing alone, is not the type of ‘clear evidence to the contrary’ which is sufficient to rebut the presumption”). In sum, the Veteran indicated that his application for a waiver was untimely due to non-receipt of the decision of indebtedness due to inconsistent mail delivery practices in prison. This is not “clear evidence to the contrary” to rebut the presumption that the notice was, in fact, properly mailed to him. See McCullough v. Principi, 15 Vet. App. 272 (2001) (discussing a similar non-receipt issue regarding a waiver of indebtedness application). The Veteran has not otherwise provided sufficient evidence to merit an extension of the 180-day deadline. (Continued on the next page)   While the Board is sympathetic to the circumstances surrounding the Veteran’s case, it is barred by regulation from granting the waiver request because the application therefor was untimely. 38 C.F.R. § 1.963(b)(2). Accordingly, the request for a waiver of indebtedness is denied. D. JOHNSON Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Mike A. Sobiecki, Associate Counsel